Saturday, October 15, 2011

When the New York City cops went in hammer and tongs - or rather, truncheons and pepper spray - to try and drive out the Occupy Wall Street protesters a few weeks back, they probably weren't thinking that they were about to help spark a global movement against capitalism.

Oops.

Of course, the main reason why something like 1,000 cities around the world had demonstrations in solidarity with Occupy Wall Street today was because capitalism is an international system and its present crisis is also international - as is its response: austerity and immiseration for the majority of the population plus bailouts for the banks, investment houses and corporations that are the cause of the mess we find ourselves in. It is that sentiment that ultimately has driven this extraordinary year of revolt around the world - from the revolution in Cairo, the jewel in the crown of the ongoing Arab Spring, to the general strikes and upheaval in Greece, Los Indignados in Spain, the near-general strike in Wisconsin and the upcoming public sector general strike in Britain at the end of November. Even the type of event that has provided the spark - occupying public squares in major cities, has been a common thread around the world, from Cairo to Madrid and now to the Occupy movement.

Here in Toronto it looked to me like about 2,000 people came out to march and, later, to occupy St. James Park at Church & Adelaide in one of Toronto's poorest neighbourhoods. I didn't hear the logic behind the choice but I assume it was meant to be in solidarity with the many homeless people who live in the area, victims of a system that lets the weak and the unlucky drop off the face of the earth. I'm told that as more people came throughout the day to the rally point, with hundreds setting up tents for an extended stay, there were close to 2,000 people in attendance for the general assembly that took place this evening. I haven't yet heard what decisions were made and what the next plans are - I had to leave shortly after the march arrived at the park - but my guess is that this movement is really just getting started.

When the banking crisis really hit the fan in 2008, the speed and severity of it took people by surprise. Ben Bernanke, head of the US central bank, the Federal Reserve, went to Washington and demanded a cheque for $700 billion within 48 hours or the financial system would collapse - and he got it with few protests. It has taken since then for it to become clear that our rulers don't have clue one how to stabilize the economy. And it has also become clear that their main answer - even though everyone knows who is responsible for the mess - has been to make working people around the world pay the price. The truth of that grave injustice and incompetence has had time to simmer and sink into popular consciousness. Occupy Wall Street - and Occupy Toronto, et al - is that consciousness beginning to turn into action.

Thursday, October 13, 2011

It's one of those "truths" in politics that is beyond questioning, like the "necessity" of an independent (i.e. free from democratic controls) central bank, but which, like everything else has evolved from a time when it wasn't actually the truth. I'm, of course, speaking of the popular idea that the Tories are "good economic managers". Underlying this prejudice is a more foundational idea that in tough times you need a government run by tightwads and hard-hearted bean counters. And nobody would ever accuse the Tories of being anything but hard-hearted. Thus comes the story the other day in the Globe & Mail that the Tories popularity is on the rise as Canadians switch from being concerned about health care (a left wing, touchy-feely issue) to jobs and the economy (a hard-headed, objective issue).

Now, it may well be true that the reason for the Tories' rise in fortunes this fall is that people believe they are best able to manage rough economic waters - though I personally suspect that it is more complex than that. But even if that is the case, it doesn't change the fact that this belief is simply wrong. Of course, the Tories are a party of big business and so are chock-a-block with (mostly) men in suits with MBAs and experience running companies and banks. Harper himself is an economist who formerly wrote policy for the conservative National Citizen's Coalition (which is, ironically not made up of citizens but of corporations). So, yes, we must grant that they likely know how to balance books, monitor supply chains and all sorts of other micro-economic administration. The trouble is the present crisis has been caused by (mostly) men in suits with MBAs who run big corporations and banks. Why should we trust the "business sector" when that is the origin of this crisis?

In fact, Harper appears to be channelling the ghost of Herbert Hoover with his insistent calls for debt reduction as a solution to the crisis. As has been pointed out by myself and many other, rather more important economists, like Paul Krugman, cutting government spending in the middle of a contraction in demand, i.e. a recession, is like pouring gasoline on the fire. That doesn't mean that debt isn't a problem but while debt is a problem it isn't the problem. The sovereign debt crisis and the debt ceiling battles in the US are symptoms of a deeper issue, which is the decline in the rate of profit. And the only way to solve that more fundamental problem is either to get rid of a system based upon production for exchange as commodities - capitalism - and replace it with an economic system based upon the democratic allocation of resources based upon need. Or to smash the living standards of the majority of people - the working class - in order to direct more money into profits.

I'll give you two guesses as to which is Harper's preferred solution.

In the Globe & Mail opinion piece by Harper that I linked to above, Harper's whole "plan" can basically be summed up as: keep doing the same thing that caused the mess, plus shore up the banks that over-extended themselves, plus attack working class living standards to increase competitiveness under the guise of "fighting the deficit/debt". Could this "work" - sure, I suppose so but not without big battles (people tend to resist big attacks on their living standards), lots of instability and the real possibility that the economic downward spiral that such a fierce attack on demand causes will not be offset by the effect of restoring the rate of profit. What's more, Harper's chest-thumping bravado about the state of the Canadian economy and state finances is disingenuous.

Canada's low state debt (not private sector debt - Canadians are in hock up to their eyebrows, as was recently pointed out by the IMF) is as much the result of Canada's peculiar position in the global economy as it is about what was done at the policy level. We are a small nation with a very big land mass, lots of natural resources and an advanced economy. The bread and butter of Canadian capitalism is global trade and investment. In recent years we have been cushioned from the decline of the US economy, our biggest trading partner, by the rise of China, which has a voracious appetite for Canadian resources such as lumber. Seeing natural resources as strategic to their own economic growth has also encouraged a boom in Chinese investment into Canada's resource sector. And China's boom is the result of heavy state intervention into the economy and financial sector, including keeping a tight rein on exchange rates to keep Chinese goods affordable in the West. In other words, China is doing precisely the opposite of what Harper is demanding. The failure of the Harper model and the success of the Chinese model doesn't exonerate capitalism as an exploitative, destructive and inefficient system but it does demonstrate that even on its own terms it is silly to think that the Tories are great economic managers. They are dogmatists whose "theories" have past their best buy date and are likely to deepen an already very deep crisis.

Tuesday, October 11, 2011

Been a bit swamped with work - and building a mud hut for my daughter - for the last week but even up to my elbows in mud and straw I knew about the iPhone 4S release and the death of Steve Jobs. As for the iPhone 4S, well, I think that the weird obsession with changing the shape of the damn phone by many tech commentators was totally ridiculous, embarrassing even. I mean, who cares? Clearly not consumers who are snapping up the things in record numbers - 1 million in 24 hours apparently. Apple hasn't staged its remarkable rise from the edge of the grave about 15 years ago by being stupid. They know that there's no point in adding too many new features in an annual refresh cycle because people won't notice ten new things. But do a few awesome things and people will go ga-ga. Besides the dual core chip and shmancy new 8-megapixel camera, etc, the introduction of the Siri personal assistant AI program is the game-changer this time and that is what is selling the phone in such big numbers. Of course, one doesn't want to over-step in the prediction department but it seems to me that Siri is going to be much bigger than most analysts have, initially, realized. Remember when the iPhone 2 came out - way back in 2007 (only four years ago!) - and we all went berserk for the cool touchscreen scrolling. It was a whole new way to relate to your computer (and a smartphone is just a small computer that happens to make phone calls). Well, introducing natural language processing along with an AI that understands context ("remind me to pick up the milk when I leave work", "Text my mom and tell her that I'll be there this weekend.") is a whole new way of interacting. From the demos it already looks pretty amazing and my guess is that Apple will make it work in a way that Google hasn't for the simple reason that Google's model is to throw innumerable ideas at the wall to see if they stick - Google Wallet, Google Voice, Google Plus, Google Goggles, etc. Apple picks its next big thing and pushes hard on it. My guess is that once Siri is established and running smoothly on the iPhone 4S we will see it rolled out to the iPad, Mac computers and the Apple TV. It will have some significant knock-on effects that we can't yet envision - just as we couldn't, when Apple came out with the iPod, know that it would lead to iTunes, etc.

I know that is a bit of a nerd-gasm that seems bereft of political analysis but it's actually a prologue to my thoughts on the death of Steve Jobs. So, please grant me a small measure of forbearance.

First off, the elevation of Jobs to sainthood is a bit nauseating and most of what people on the left are saying is true - as much as anything, Apple pioneered the outsourcing to Asia of component manufacturing to take advantage of sweatshop conditions. That reality is underlined by the fact that Jobs' chosen successor, Tim Cook, was the man most responsible for setting up those "supply & distribution chains" in Asia. And it's absurd to think that Jobs came up with all the tech ideas that are now key to Apple's success or even that they originated within Apple's research and development department (Apple actually does very little R&D compared to other tech companies). But to say that is a bit besides the point - individuals always invent tools and generate ideas in the context of a socially generated need and on the foundation of work by others (somebody invented the computer and then the graphical user interface for which a mouse was a tool that made sense, Apple commercialized these advances. Einstein came up with relativity in the context of a series of well-known problems and partial solutions around the turn of the century). All knowledge and all inventions are first and foremost social. But it's also silly to just pretend that Jobs existence didn't matter (or Einstein's for that matter). In a world where a tiny elite get to make the key decisions in politics and industry, most of the time their decisions do make a difference and the fate of companies, industries and nations can be decided by the brilliance or foolishness of the leader. This is a particularly inefficient way to run society, of course, and makes the world prone to a lot of avoidable disasters - even if it weren't for the fact that the profit dynamic often benefits from avoidable disasters. And it's not the only dynamic - masses of people do still struggle to make their voices and ideas heard, scientists toiling away in their thousands do generate new devices and ideas to provide technological advances. But the hierarchical and undemocratic nature of our society gives undue weight to the role of "leaders".

And the dramatic turnaround of Apple from its near-death experience in the late 1990s cannot be separated from the return of Steve Jobs to the helm. He was a master at finding the cutting edge of useable - not beta - technology; connecting it to popular desires and fantasies about technology; understanding the importance of "stylish" and ergonomic form factors (basically bringing fashion or the car industry model of annual design changes into the computer world) that meant that their products "just work" without complicated user's manuals; and then he understood, or came to understand, how to integrate it into a total, monetized and convenient ecosystem. Before iTunes started carrying movies - and, of course, they aren't the only ones any more - I would go to the considerable trouble of downloading pirate films simply because it was the only way to get movies online. Hollywood and the music industry refused to offer its films and music online, fearing the loss of control (and profit). The arrival of iTunes smashed first the music industry's distribution model and then the film and television industry as well. Granted, both industries have learned to profit from the new model (with Apple dipping its fingers into the pie now) but we forget that this simply didn't exist ten years ago. Just the other day I was talking to a musician I know about download cards that indie musicians sell at shows. No longer are they saddled with cases of CDs in their basement or car trunk. Take home the download card - or go onto your iPhone or iPad and type in a few numbers and ba-da-boom you have the album on your phone. With iCloud it will instantly exist across all of your Apple devices. That is a significant advance. It wasn't that they invented anything new per se it was that they knew how to meld together established technologies towards disruptive ends. Apple is now a behemoth with a total ecosystem that is awe-inspiring, particularly now with the introduction of iCloud and the deep integration of Siri into iOS.

Back to the hagiography of Jobs, of course the media is drooling over him. He was the perfect capitalist: modest in appearance, a family man who shunned ostentatious displays of wealth, and a "self-made man" who was outcast from the garden of Apple and then returned as a mature man to save it again. The blood and guts, as always, are disappeared - we don't hear about the ruthless competition and the tens of millions spent on litigation to disrupt competitors (the ongoing patent war with Samsung, for instance, has reached ludicrous proportions). And we don't hear much about the toiling workers in Chinese sweatshops who are denied the most basic rights and are paid a pittance in order to sell the glorious iPhone at a low cost to North American and European consumers. I don't pretend to know the demographics of the people mourning Steve Jobs with flowers and sticky notes outside of Apple Stores around the world - are they rich, middle class, working class, etc? Beats me. My guess is that in, for instance, China, there aren't a lot of workers taking flowers to mourn Steve Jobs. They have bigger fish to fry. But to lots of people in North America he is a symbol of something, even if it is a manufactured symbol and that is interesting to me. And - while I'd rather people identified with Occupy Wall Street (and Boston, and Chicago and Toronto, et al) - I'm not willing to just write people off who look to Steve Jobs as dupes. In many ways he represented the hope that the world can be changed - even if it was primarily via tech gadgets - and I, for one, am not willing to shit on that hope.